Among the 8 Key Elements of Public Financial Management Success, what do you think is our system's weakest link? What must be done to improve it?

I. The Climate for Reform:

The first element of PFM success is necessarily the

widespread recognition and acknowledgement that

change is required, along with a commitment from key

stakeholders to effect the necessary reforms.

II. Governance - The Legal and Institutional Framework:

The second essential element of PFM success is that of

a well-defined legal and regulatory framework: one that

facilitates the implementation of efficient and effective

public-service arrangements. Appropriate institutions

must be in place, as well as a set of recognised codes,

standards and practices.

III. Governance - The Values System:

The public entrusts taxpayer funds to the government

and expects them to be used appropriately. Yet the

appropriate attitudes and behaviours are not always

culturally embedded. The third key to PFM success is

therefore an open, honest and responsible approach to

the way services are planned, executed and reported,

which signifies a strong intent to work in the public interest.

IV. Capacity and Capability:

The fourth key to PFM success is ensuring that the

appropriate resources are available to support the

application of each aspect of PFM, particularly in terms

of people and systems. "Without the necessary systems

and skilled personnel to implement them, no PFM

reform process can be successful".1

V. Fiscal and Policy Framework:

"The main output of PFM systems is the budget, through

which public policies are financed."2 A credible budget

is essential, reflecting the expected financial impact of

the government's policies and its use of resources. As a

result, the fifth element of PFM success is that of a clearly

defined and comprehensive fiscal and policy framework.

VI. Performance Management:

The sixth key element is the successful implementation

of the budget, both in macro terms and at the

organisational level. The budget must be well managed,

monitored and reported to achieve the anticipated

outcomes, with three things - value for money, the

efficient and effective delivery of services, and financial

compliance - acting as overriding performance principles.

VII. Reporting:

Empirical evidence is emerging that highlights the

positive relationship between the degree of fiscal

transparency and measures of fiscal sustainability. Not

surprisingly, then, appropriate, transparent reporting

against planned outcomes is the seventh key element

of PFM success, helping governments be accountable

for their fiscal actions.

VIII. Scrutiny and Assurance:

Reported information must be reliable, whether for

purposes of transparency, accountability or decision

making. It must also be capable of withstanding

scrutiny from different levels and forms of review. As

a result, the eighth key element of PFM success is

that of subjecting information to effective scrutiny and

assurance, thus generating confidence in its veracity.

Confidence is further enhanced by subjecting this

information to external, independent audit.